Vizag realtors lure buyers with sandalwood plantations

VISAKHAPATNAM: In their quest to come up with new and unique marketing strategies to attract investors, layout developers are now offering sandalwood plantation in layouts at Kothavalasa and S Kota promising high returns after 12 years. According to sources, there are at least a handful of such schemes being offered in this belt.

"We received a call from a layout developer in Kothavalasa recently. He told us that we can purchase land as an investment option and they would plant sandalwood and take care of the plantation for the next 12-15 years," said Ramakrishna Rao of MVP Colony. "They said that if we don't have plans to build a house and are only looking at purchasing land as an investment option, then we can get up to Rs 20 lakh at the end of 15 years just from the proceeds of sandalwood sales."

"The developer told us that in between if we need to construct a house, they will clear the plantation from our plot and whatever the sale of trees fetches, they will take 50% and give the remaining 50% to us."

A senior city-based builder said, "These schemes have been on offer across many tier-2 cities in our country. But we have not seen many of them become successful due to various reasons. Twelve years is a long time and unless a developer has a good track record of delivering similar projects earlier, it would be very risky to invest in such a plan. But if the plot itself has good value in the market, then it might make sense to go ahead with the investment."

Adding another word of caution, he said: "Even if you purchase plots offering such schemes you need to keep a check on the growth of the plantation to ensure that you are not cheated."

However, a horticulture officer, who requested anonymity, said, "Sandalwood does not grow easily. It requires high levels of rainfall and soil extremely rich in nitrogen. They need other trees for support initially as they don't grow on their own. Instead teak, tamarind or soapnut are better suited to our region. Earlier, sandalwood was widely available here but now it has become rare."

Vizag divisional forest officer P Rama Mohan Rao said, "For planting sandalwood, one does not need to take any permission from our department. It is only when they are cutting the trees that they need to approach us for permission."

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According to a senior city-based builder, such schemes have been on offer across many tier-2 cities in the country. However, not many of them have been successful due to various reasons